The The Economic Survey has said insurance penetration in India has grown from 2.3 per cent (life — 1.8 per cent; non-life — 0.7 per cent) in 2000 to 3.9 per cent (life — 3.1 per cent; non-life — 0.8 per cent) in 2013.
According to data from Swiss Re, a reinsurance company based in Zurich, overall insurance penetration in India (measured as percentage of premiums to gross domestic product), which was surging consistently till 2009, has been seeing a gradual decline. However, while life insurance penetration saw a sharper decline, non-life penetration has seen some marginal improvement (from 0.7 per cent in 2012-13 to 0.8 per cent in 2013-14), though it still stands below one percent.But compared to emerging markets like Brazil and China, which have life insurance penetration of 2.2 (estimated) and 1.6 (provisional) respectively, India’s life insurance penetration stands better as per Swiss Re figures for 2013.
During 2013-14, the life insurance industry recorded a premium income of Rs 3.14 lakh-crore as against Rs 2.87 lakh-crore in the previous financial year, registering a growth of 9.4 per cent. While private-sector insurers posted 1.4 per cent decline in their premium income, Life Insurance Corporation of India (LIC) recorded 13.5 per cent growth during the period, the Survey said.
However, latest data of new premiums from Life Insurance Council shows that the life insurers had posted an overall decline of 8.7 per cent in new premium collection. Here, while private life insurers saw a 19.1 per cent growth in premiums, LIC posted a 17.26 per cent in new premiums.
The Pradhan Mantri Jan Dhan Yojana (PMJDY) launched on August 28, 2014, and the RuPay Card, according to the Economic Survey are complementary and will enable achievement of multiple objectives such as financial inclusion, insurance penetration, and digitalisation. PMJDY has offered Rs 1 lakh accident insurance for all RuPay cardholders and also Rs 30,000 life insurance for those who enrolled in the Jan Dhan scheme before January 26, 2015.
The Survey said that the Insurance Laws (Amendment) Ordinance 2014 was promulgated on December 26, 2014, with a view to removing archaic and redundant provisions in the insurance laws. It also said that this empowered the Insurance Regulatory and Development Authority of India to enable more effective regulation. The ordinance enhanced the foreign equity investment cap in an Indian insurance company from 26 to 49 per cent with the safeguard of Indian ownership and control.
Assets under National Pension System rise
The Economic Survey on Friday said assets under management under the National Pension System (NPS) witnessed an increase from Rs 48,136 crore as on March 31, 2014, to Rs 72,000 crore as on December 31, 2014, a rise of 49.6 per cent.
NPS, initially introduced for new recruits to central government service (except armed forces at the first stage) with effect from January 1, 2004, has been subsequently extended to autonomous bodies, state governments, and the unorganised sector.
Till December 31, 2014, a total of 7.97 million members have been enrolled under NPS.
The Swavalamban Scheme, a co-contributory pension scheme launched in 2010 for persons in the unorganised sector, is now open to those citizens of India who are not part of any pension/provident fund scheme. A total of 6,29,000 subscribers have already been enrolled under the scheme till 31 December 2014 during FY 2014-15.